American Vanguard unit enters five-year $275 million restated revolver

By Marisa Wong

Los Angeles, Aug. 10 – American Vanguard Corp. subsidiary Amvac Chemical Corp. entered into a third amended and restated loan and security agreement on Aug. 5 with a group of commercial lenders led by Bank of the West as administrative agent, lead arranger and bookrunner, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement is a senior secured lending facility consisting of an up to $275 million line of credit, an up to $150 million accordion feature, letter-of-credit and swingline sub-facilities with limits of $25 million each.

The facility matures on Aug. 5, 2026.

Revolving loans bear interest at Libor plus a margin ranging from 137.5 basis points to 237.5 bps, depending on the company’s total leverage ratio.

An unused line fee ranges from 15 bps to 30 bps, also based on total leverage ratio.

Initially, the Libor margin is 187.5 bps and the unused line fee 20 bps.

The credit agreement contains two key financial covenants: a maximum total leverage ratio of no more than 3.5 to 1 during the first three years, stepping down to 3.25 to 1 as of Sept. 30, 2024 and a minimum fixed-charge coverage ratio of at least 1.25 to 1.

In addition, to the extent that it completes acquisitions totaling $15 million or more in any 90-day period, Amvac may step-up the total leverage ratio by 0.5 to 1, not to exceed 4.00 to 1, for the next three full consecutive quarters. Acquisitions below $50 million do not require agent consent.

The credit agreement replaces the company’s second amended and restated credit agreement, which was set to mature on June 30, 2022.

American Vanguard is an agricultural chemical company based in Newport Beach, Calif.

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